From Volume To Value

There are many abbreviations and buzz words in the media
when it comes to healthcare. One such initialism getting
some attention in North Dakota is ACO, which stands for
Accountable Care Organization.

Defining an ACO is complex, but essentially it is a
specific model for healthcare organizations (generally a
network of physicians or hospitals) that helps them focus
on prevention of disease, in addition to care
coordination to better manage the patient. The ACO is
“accountable” for providing care to its patients with an
emphasis on population health to lower healthcare costs.
The U.S. healthcare system is changing how hospitals are
paid by insurance companies, Medicare, and Medicaid for
treating their patients. There is a shift occurring
across the nation, led by the Centers for Medicare and
Medicaid (CMS), to reduce healthcare costs. Two of the
ways this can happen are by providing care that prevents
chronic disease (which can be costly to treat) and by
making sure chronic conditions that do develop receive
appropriate follow-up care. ACOs promote quality over
quantity when it comes to healthcare.

“We’re moving, as we say as part of the nomenclature,
from volume to value,” said Brad Gibbens, deputy director
of the Center for Rural Health at the University of North
Dakota School of Medicine and Health Sciences. “The U.S.
healthcare system has traditionally paid providers per
encounter, test, or procedure. Every time something is
done to us or for us as a patient, that provider is paid
based on volume. The more tests you order, the more
retests, etc., the more there is cost and therefore
reimbursement [from insurance] to the healthcare
organization for that treatment.”

Several rural hospitals in North Dakota are participating
in an ACO model that is providing technical assistance in
adopting this new type of payment structure. For the next
three years, participating rural hospitals can learn how
to function as an ACO with this support in place, before
fully making the change. One of the benefits to
participating is access to data that they have never had
access to previously. The data provide a way to identify
patients who have not had their appropriate health
screenings, such as mammograms, colonoscopies, and blood
tests. Another tool is that the ACO participants meet
regularly to discuss what they are having success with as
part of the move toward value-based reimbursement.
McKenzie County
Healthcare Systems in Watford City is one of the
facilities participating.

Dan Kelly, CEO of McKenzie County Healthcare Systems
in Watford City, North Dakota

“I am thoroughly convinced that the way hospitals do
business today will have to change,” said Daniel Kelly,
CEO. “The benefit in participating in the ACO now is that
we’re learning to better provide care that is
cost-effective and timely. The greater benefit is to our
patient population. Our country has a history of not
following good preventive medical practices, and our
medical providers and hospitals have been focused on
caring for people once they are sick. This is not
prevention.”

Many factors contribute to healthcare costs. Americans
spend more on healthcare than other countries but do not
necessarily have the best health outcomes. According to
the Centers for Disease Control and Prevention (CDC),
about 86 percent of all healthcare spending was for
people with one or more chronic medical conditions.
Nationally, about half of all adults have one or more
chronic disease conditions and about one quarter have two
or more. The changes in how healthcare is delivered and
how providers are reimbursed are built around a public
policy goal to improve health, improve care, and to
control or lower costs.

North Dakota’s rural hospitals face unique challenges in
adapting to changes in healthcare policy and treating
their patients in a cost-effective but high-quality
manner. They regularly deal with shortages in their
healthcare workforce, which can be exacerbated by their
rurality — recruiting and retaining healthcare workers to
small communities can be difficult.

“Right now, we are faced with three overwhelming issues
in the healthcare arena: costly care, physician
shortages, and staff shortages,” said Kelly. “Changing
our reimbursement system is the one thing that, if it
proves successful, can address all three of those issues.
It’s less expensive to prevent illness than it is to
treat. It takes fewer physicians and staff if fewer
patients are being admitted to the hospital. The model
has allowed our facility the financial resources to hire
a case manager that contacts patients for good preventive
care, and proper follow-up care.”

Sakakawea Medical
Center (SMC) in Hazen, North Dakota, also
participates in the same ACO model as McKenzie County
Healthcare Systems. SMC has a partnership with Coal Country Community
Health Center in nearby Beulah that contributes to
the ability to implement the requirements of an ACO. It
takes an entire team to make the transition to
value-based reimbursement work, and these two facilities
already operate together successfully. Care coordinators
from both organizations are plugged into the community
and work together to help patients find support services
to better manage their diseases or prevent them, such as
wellness centers, services offered through public health,
and health-screening events.

If their healthcare is managed better,
then that’s what it’s all about.

Darrold Bertsch, CEO of Sakakawea Medical Center in
Hazen, North Dakota, and Coal Country Community
Health Center in Beulah, North Dakota

“The partnership allows us to better close the loop on
how we provide care between our clinics and hospitals,”
said Darrold Bertsch, CEO of Sakakawea Medical Center and
Coal Country Community Health Center. “When the day is
done, the most significant thing is that we are making a
difference in the lives of the population we serve. If
their healthcare is managed better, then that’s what it’s
all about.”

Kelly echoes this sentiment. He said, “As an
administrator, we don’t talk a lot about this, but it’s
not that great of a feeling to be focused on people when
they’re seriously ill. Participating in the ACO and
shifting to a focus on wellness as opposed to a focus on
illness makes it exciting to come to work. We are finally
doing what we should have been doing all along.”

We are finally doing what we should have
been doing all along.

North Dakota’s rural healthcare organizations are poised
to successfully implement changes to their reimbursement
and payment structure. They have a history of
collaboration and networking that allows them to share
best practices and support each other in improving the
health of all of the state’s residents.

Nikki Massmann
is the Director of Communications at the Energy and Environmental Research Center (EERC). Prior to her position at the EERC, she served as Communication Coordinator at the Center for Rural Health at the University of North Dakota's School of Medicine and Health Sciences.